A frosty time is being had by all round here, and that includes the pound.

As sub-zero temperatures sweep across Britain, sterling is finding itself caught up in a web of concerns over the impact the snow will have on an already faltering U.K. economy and over the increasing threat that the euro zone’s crisis is posing to U.K. banks. For the last few months, sterling had done rather well.

Indeed, it has even held up against a strengthening dollar:

Approval for the Conservative-led coalition government’s fiscal tightening, signs that the U.K. economy was more robust than expected and the U.K.’s exclusion from the problems of peripheral Europe all helped to make the pound a good bet.

Now, this picture of success is falling apart. Not only is the U.K. economy swiftly losing traction, well in advance of an increase in value-added tax that kicks in at the start of the new year, but the country is now being dogged by persistently high inflation pressures.

Hopes of a last-minute shopping spree over Christmas have now been dashed as snow-bound Britain keeps many consumers away from their desks as well as away from the shops.

The number of residential properties that were repossessed by lenders in the U.K. between April and June fell to the lowest level since the first quarter of 2008 thanks to record-low interest rates, greater forbearance by banks, and government measures to help people struggling to pay off their mortgage.